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Capgemini Super Techies Show Season 2: The Deutsche Bank Challenge Presentation

Capgemini Super Techies Show Season 2: The Deutsche Bank Challenge Presentation

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Capgemini Super Techies Show Season 2: The Deutsche Bank Challenge Presentation

  1. 1. The Deutsche Bank Challenge Suggest an appropriate solution to ensure timely reminders to clients for KYC review/renewal and facilitates document submission & authentication
  2. 2. The Facts • A German global banking and financial services company with its headquarters in the Deutsche Bank Twin Towers in Frankfurt, Germany • It has more than 100,000 employees in over 70 countries, and has a large presence in Europe, the Americas, Asia-Pacific and the emerging markets • It offers financial products and services for corporate and institutional clients along with private and business clients • Services include sales, trading, research and origination of debt and equity; mergers and acquisitions (M&A); risk management products, such as derivatives, corporate finance, wealth management, retail banking, fund management, and transaction banking • Listed on both the Frankfurt (FWB) and New York stock exchanges (NYSE)
  3. 3. Background on Challenge • Reserve Bank of India (RBI) has mandated all banks to prevent themselves from being used, intentionally or unintentionally, by criminal elements for money laundering or terrorist-financing activities – Vide the RBI circular on • Know Your Customer (KYC) norms • Anti-Money Laundering (AML) standards • Combating of Financing of Terrorism (CFT) • Obligation of banks under PMLA, 2002 • KYC procedures (forming part of above guideline) enable banks to know/understand their customers and their financial dealings better • This helps banks manage their risks prudently
  4. 4. Background on Challenge • Apart from performing KYC checks on the client at the time of adoption — after the account is opened — banks are also required to introduce a system of periodic updation and review of KYC information and documentation including photographs • The periodicity of such updation is (at a minimum) once in 2 years for high-risk, 8 years for medium-risk and 10 years for low-risk clients • Non-completion of required updation and review of KYC documentation within the stipulated time requires account closure
  5. 5. The Problem • The overall compliance with this regulatory guideline is largely dependent on the client’s ability to support and provide required documentation within stipulated time and on a periodic basis • Review/renewal of KYC document is delayed due to diversified customer segmentation • Collection of updated KYC documents from certain customers requires deployment of internal and external resources (external agencies), which has additional cost implication on the Banks • Any delay in review/renewal has adverse implications
  6. 6. The Challenge Statement Suggest an appropriate solution to: 1. Ensure timely and repetitive reminders to the clients falling due for KYC review/renewal, considering the above challenges 2. Facilitates customer submission of KYC documentation across geographies with the least cost and efforts involved 3. Establish a process to verify/authenticate submitted KYC documents
  7. 7. The Challenge Statement - Details • The diversified customer segmentation encountered by Banks: – Many customers ignore repeated notifications by the Bank; hence, requires frequent follow-ups – Clients not available due to various reasons, e.g. travelling, etc. – Clients with shifted residential address and contact details – Non-traceable – Inadequate ongoing access to clients – Non-resident Indian (NRI) customers – Non-Individual customers requiring additional KYC documents for each promoter/Beneficial Owners and legal representatives – Tedious follow up /deep dive required for corporate ownership information in case of unlisted firms where such information is highly protected.
  8. 8. Important Points to Remember Any delay in review/renewal has the following adverse implications: • Breach of regulatory guideline — Scrutiny and/or potential penal action by the regulator • Business impact — Per regulatory mandate, any non-compliant accounts to be closed • Operating expenses — Extensive amount of cost incurred in issuing reminder letters and deploying resources to follow up with clients for collecting renewed documents • Risk management — Hinders ability of Banks to exercise their judgment to identify suspicious transactions on account of nonavailability of the client’s updated identity